Datadog Inc (DDOG)

Return on assets (ROA)

		Mar 31, 2025	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020
Net income (ttm)	US$ in thousands	165,757	183,746	192,145	163,078	115,285	48,568	-34,459	-83,074	-83,984	-50,160	-13,957	6,544	2,061	-20,745	-44,074	-53,740	-44,094	-24,547	-7,496	3,493
Total assets	US$ in thousands	6,010,380	5,785,340	4,631,470	4,412,390	4,141,470	3,936,070	3,543,300	3,312,170	3,139,740	3,004,850	2,797,600	2,654,490	2,529,020	2,380,790	2,194,170	2,076,730	1,952,070	1,890,280	1,814,280	1,783,710
ROA		2.76%	3.18%	4.15%	3.70%	2.78%	1.23%	-0.97%	-2.51%	-2.67%	-1.67%	-0.50%	0.25%	0.08%	-0.87%	-2.01%	-2.59%	-2.26%	-1.30%	-0.41%	0.20%

March 31, 2025 calculation

ROA = Net income (ttm) ÷ Total assets
= $165,757K ÷ $6,010,380K
= 2.76%

The analysis of Datadog Inc.'s return on assets (ROA) over the specified periods reveals a trajectory marked by significant fluctuations, transitioning from marginally positive figures to substantial negative values, and subsequently rebounding into positive territory.

In the initial reporting periods, through June 2020 to March 2021, the company's ROA remained modest, with the figure starting at approximately 0.20% and declining to -2.26%. This decline indicates that during this phase, Datadog was experiencing challenges in generating profits relative to its asset base, highlighting potential operational or market pressures.

The subsequent periods, from June 2021 through the end of 2022, continued to be characterized by negative ROA figures, with the lowest point reaching approximately -2.67% in March 2023. These negative values suggest that the company was largely unprofitable on an asset basis during this phase, possibly due to high operating costs, substantial investments, or competitive market factors impacting profit margins.

However, starting from December 2023, a notable positive shift emerges. The ROA turns positive at 1.23%, reaching as high as 4.15% in September 2024 before slightly declining to 2.76% in March 2025. This upward trend indicates an improvement in the company's efficiency in utilizing its assets to generate earnings, which may reflect successful strategic initiatives, improved operational efficiencies, or a combination of both.

Overall, the pattern of Datadog’s ROA reflects a period of difficulty and losses followed by a phase of recovery and improved profitability. The recent positive readings suggest enhanced asset utilization efficiency and potentially stronger operational performance. Continuous monitoring of future ROA figures will be essential to determine whether these positive trends can be sustained and to evaluate the company's ongoing profitability relative to its asset base.